April was a big month to cover New York’s first all-electric skyscraper. It also was a month where some stocks to watch began to show their faces.
Alloy Development is a developer focused on the Brooklyn area of New York City. The developer is building 505 State Street as part of Alloy Block. This will be a five-building development with residential, educational, office, cultural and retail uses.
The structure at 505 State Street is the first tower in the development. Moreover, it is all-electric. More will follow.
As Bloomberg points out, a water-source heat pump system will provide heating and cooling.
“That means there’s a loop of cold water and a loop of hot water that go to the units that are in the apartments, that then blow air over the loops, and heat and cool the spaces,” Bloomberg reported Alloy President AJ Pires’ comments in April.
If you’re an investor, there are businesses other than Alloy whose products could contribute to this and other innovative and precedent-setting developments in the future. Some are public, and others are private.
Here are three companies who have stocks to watch.
Stocks to Watch: Carrier (CARR)
Last May, Barron’s contributor Al Root recommended that investors buy Carrier (NYSE:CARR) stock because it doubled down on the HVAC (heating, ventilation, and air conditioning) industry.
It had just announced a $13.2 billion cash-and-stock acquisition of German heat pump manufacturer Viessmann Climate Solutions.
Root wrote in May 2023, “Carrier also plans to exit most of its refrigeration, fire, and security businesses, leaving it looking like a closer facsimile of Trane when all is said and done.”
In early March, the company announced the sale of its Industrial Fire Business for $1.43 billion. As I said in early April, it was part of the company’s focus on higher-margin growth in climate and energy solutions.
Over the past year, Carrier has underperformed Trane Technologies (NYSE:TT), its largest competitor in the HVAC industry. The same is true year-to-date in 2024.
Carrier reported Q1 2024 results on April 25. Its revenues were $6.18 billion, 17% higher than a year earlier, while its earnings per share were 62 cents, 24% higher than the Zacks Consensus Estimate and 19% higher year over year.
At 2.3 times sales and 21.9 times forward earnings, it is considerably cheaper than Trane’s stock, at 4.0 times sales and 31.0 times forward earnings.
Furthermore, I look for Carrier to sell more of its Aquazone high-capacity water-source heat pumps in the future.
Generac Holdings (GNRC)
Generac Holdings (NYSE:GNRC) first announced the acquisition of ecobee Inc., a Toronto-based manufacturer of smart home solutions, in November 2021. It paid up to $770 million for the company based on meeting specific performance targets.
“ecobee’s solutions are an important addition to Generac’s extensive residential energy technology portfolio,” Generac CEO Aaron Jagdfeld said at the time. “Residential HVAC systems represent the largest energy-consuming device in the home today and ecobee’s smart thermostats and sensors offer the most intelligent way to balance comfort with conservation.”
Generac, known for its residential and commercial back-up generators, acquired ecobee and its software to be the central hub of its residential energy ecosystem. Its purchase of the firm for $770 million is a bargain as Generac further develops its energy technology solutions.
As the Bloomberg article pointed out, every unit at 505 State Street has an ecobee smart thermostat that tenants can set. Hence, the temperature lowers whenever the thermostat senses no one is home.
That’s one of the many products integrated into the all-electric apartment building to make it more energy-efficient than conventional.
Whenever I walk into Home Depot (NYSE:HD) and see the Generac generator, I’m reminded what a great business it is.
Matthews Korea Active ETF (MKOR)
The third item from the Bloomberg article about 505 State Street is an induction oven included in all 440 units. Some chefs believe induction is a better method of cooking than natural gas.
“I have been a big believer in electrifying kitchens, especially in the advent of induction technology. For me, it’s not just about sustainability but also about worker comfort, health, and safety. Gas stoves don’t just heat up the pans; they heat up the kitchen with their excess heat,” Detroit chef Jon Kung told Bloomberg in October 2023.
It’s interesting to hear that. One of my favorite restaurants in Halifax, where I live, uses an old-fashioned electric stove to cook up its wonder mushroom bao. They are so tasty.
You might wonder why I’ve included an actively managed ETF in my three stocks.
Well, GoodHousekeeping.com, rates Samsung Electronics’ slide-in induction range as the best value in induction ranges at $1,649. The South Korean company’s stock — common and preferred — is two of the three top holdings of the Matthews Korea Active ETF (NYSEARCA:MKOR) at 4.9% and 11.3%, respectively.
As I said, the ETF is actively managed, with a focused portfolio of 35 South Korean stocks. Samsung accounts for a big piece of the overall portfolio. As emerging markets go, South Korea is one of the best.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
